3 Jul 18

VW ends diesel bonus scheme

The end of June marked the expiry of Volkswagen's diesel subvention programme. The so-called Umweltprämie, which was not only offered by VW, but also Daimler and other car makers, meant customers received a premium of up to €10,000 for the scrappage of their Euro 4 or older diesel when they bought a new one.

These premiums unquestionalby contributed to German car sales rising to levels not seen in almost a decade. A source within VW told Automotive News that “Everyone that qualified for the program likely would have taken up the offer by now. Extending it a third time would not have had much of an effect.”

The end of the Umweltprämie should have a positive effect on residual values of young used cars, prices of which were under a lot of pressure.

Even though the programme is over, VW's “Germany Guarantee” remains in place through the end of this year. This separate incentive plan should restore confidence in diesel by offerings drivers that purchase a new Euro 6 diesel (or even certain used diesels that are less than a year old) the possibility to return their vehicle for a refund should they be affected by a driving ban.

German new car registrations climbed 3 percent between January 1st and May 31st to 1.50 million vehicles. The share of diesels in the mix, however, remains low at just under a third of the market. Before the first warnings of driving bans in February 2017, nearly one in two new cars sold in Germany were diesel-powered.

Source: Automotive News

Picture copyright: VW, 2018

Authored by: Dieter Quartier